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Insolvency trade body campaigns for law change

Date Added: 02/03/2011  

A campaign has been launched by insolvency trade body R3 - The Association of Business Recovery Professionals to change a law to help save struggling companies.

Steven Law, president of the organisation, stated that as many as 2,000 firms a year could be saved as a result of a change in legislation, which could prevent suppliers to businesses demanding "extortionate" ransom payments.

He explained that firms which are forced to make these payments therefore have little chance of being rescued.

"It is unnecessary for suppliers to take this action as those who continue to supply during insolvency have the security of being paid as an administration expense - ahead of all other payments," Mr Law said.

R3 estimates that almost a quarter of administrations are pre-packed because of fears over suppliers taking unreasonable action.

Dave Martin, business development manager at Business Finance Solutions, recently advised firms which are struggling financially to get help as soon as possible.

Posted by Julie Cutts  

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